Tyson Foods(TSN) - 2025 Q3 - Quarterly Results

Financial Highlights This section provides an overview of Tyson Foods' financial performance for Q3 and the first nine months of fiscal 2025, highlighting sales growth, operating income, and EPS Third Quarter 2025 Performance Tyson Foods reported a 4.0% sales increase to $13.88 billion in Q3 2025, with GAAP operating income down 24% due to goodwill impairment, while adjusted operating income and EPS grew Q3 2025 Financial Highlights | Metric | Q3 2025 | Q3 2024 | Change | | :--- | :--- | :--- | :--- | | Sales | $13,884M | $13,353M | +4.0% | | GAAP Operating Income | $260M | $341M | -24% | | Adjusted Operating Income | $505M | $491M | +3% | | GAAP EPS | $0.17 | $0.54 | -69% | | Adjusted EPS | $0.91 | $0.87 | +5% | - The company recorded a significant goodwill impairment charge of $343 million in its Beef segment during the third quarter[5] - CEO Donnie King highlighted the results as the fifth consecutive quarter of year-over-year growth in sales, adjusted operating income, and adjusted EPS, attributing it to the strength of the company's multi-protein portfolio and focus on operational excellence[4] First Nine Months 2025 Performance Sales for the first nine months of fiscal 2025 grew 2.1% to $40.58 billion, with adjusted operating income up 28% and adjusted EPS up 36%, despite a decline in operating cash flow Nine Months 2025 Financial Highlights | Metric | Nine Months 2025 | Nine Months 2024 | Change | | :--- | :--- | :--- | :--- | | Sales | $40,581M | $39,744M | +2.1% | | GAAP Operating Income | $940M | $884M | +6% | | Adjusted Operating Income | $1,679M | $1,308M | +28% | | GAAP EPS | $1.20 | $1.25 | -4% | | Adjusted EPS | $2.97 | $2.18 | +36% | - Cash provided by operating activities was $1,620 million, a decrease of $353 million from the prior year[5] - The company maintained strong liquidity at $4.0 billion and reduced total debt by $722 million during the first nine months[5] Segment Performance This section details the sales and operating income performance across Tyson Foods' Beef, Pork, Chicken, and Prepared Foods segments for Q3 and the first nine months of fiscal 2025 Segment Sales and Operating Income (GAAP) Q3 2025 sales growth was price-driven, with Beef incurring a significant GAAP operating loss due to impairment, while Chicken and Prepared Foods were strong profit contributors Q3 2025 Segment Sales Analysis | Segment | Sales (M) | Volume Change | Avg. Price Change | | :--- | :--- | :--- | :--- | | Beef | $5,603 | -3.1% | +10.0% | | Pork | $1,506 | +1.5% | -1.6% | | Chicken | $4,220 | +2.4% | +1.1% | | Prepared Foods | $2,515 | -2.3% | +5.7% | | Total | $13,884 | -0.1% | +3.7% | Q3 Segment Operating Income (GAAP) | Segment | Q3 2025 OI (M) | Q3 2024 OI (M) | Q3 2025 Margin | | :--- | :--- | :--- | :--- | | Beef | $(494) | $(69) | -8.8% | | Pork | $36 | $(62) | 2.4% | | Chicken | $367 | $244 | 8.7% | | Prepared Foods | $302 | $203 | 12.0% | | Total | $260 | $341 | 1.9% | Adjusted Segment Operating Income (Non-GAAP) Adjusted Q3 operating income shows a reduced Beef segment loss and strong profitability in Chicken and Prepared Foods, with Chicken leading nine-month adjusted income Q3 Adjusted Operating Income (Non-GAAP) | Segment | Q3 2025 Adj. OI (M) | Q3 2024 Adj. OI (M) | Q3 2025 Adj. Margin | | :--- | :--- | :--- | :--- | | Beef | $(151) | $(69) | -2.7% | | Pork | $36 | $22 | 2.4% | | Chicken | $345 | $307 | 8.2% | | Prepared Foods | $246 | $203 | 9.8% | | Total | $505 | $491 | 3.6% | Nine Months Adjusted Operating Income (Non-GAAP) | Segment | YTD 2025 Adj. OI (M) | YTD 2024 Adj. OI (M) | YTD 2025 Adj. Margin | | :--- | :--- | :--- | :--- | | Beef | $(332) | $(220) | -2.0% | | Pork | $150 | $123 | 3.2% | | Chicken | $1,025 | $659 | 8.2% | | Prepared Foods | $724 | $700 | 9.8% | | Total | $1,679 | $1,308 | 4.1% | Fiscal 2025 Outlook This section outlines Tyson Foods' financial projections for fiscal year 2025, including segment-specific and total company guidance for sales, operating income, and cash flow Segment Outlook Tyson projects an adjusted operating loss for Beef in fiscal 2025, while Chicken is expected to be a strong performer, with Pork and Prepared Foods also profitable - Beef: Anticipates adjusted operating loss between $(475) million and $(375) million[9] - Pork: Anticipates adjusted operating income of $175 million to $200 million[10] - Chicken: Anticipates adjusted operating income of $1.3 billion to $1.4 billion[11] - Prepared Foods: Anticipates adjusted operating income of $925 million to $1.0 billion[12] Total Company Outlook Tyson Foods forecasts 2-3% sales growth and $2.1-2.3 billion in adjusted operating income for fiscal 2025, with capital expenditures below $1.0 billion and strong free cash flow Fiscal 2025 Full Year Guidance | Metric | Outlook | | :--- | :--- | | Sales Growth | +2% to +3% vs. FY2024 | | Adjusted Operating Income | $2.1B to $2.3B | | Capital Expenditures | ≤ $1.0B | | Net Interest Expense | ~$375M | | Free Cash Flow | $1.0B to $1.3B | | Adjusted Effective Tax Rate | ~25% | - The company expects total liquidity to remain above its minimum target of $1.0 billion[18] Consolidated Financial Statements This section presents Tyson Foods' consolidated income statements, balance sheets, and cash flow statements for the specified periods, detailing key financial positions and performance Consolidated Condensed Statements of Income Nine-month sales increased to $40.58 billion, but a $343 million goodwill impairment led to a slight decrease in net income and diluted EPS, despite gross profit growth Nine Months Ended June 28, 2025 - Income Statement Highlights (in millions) | Line Item | 2025 | 2024 | | :--- | :--- | :--- | | Sales | $40,581 | $39,744 | | Gross Profit | $2,836 | $2,567 | | Goodwill Impairment | $343 | $0 | | Operating Income | $940 | $884 | | Net Income Attributable to Tyson | $427 | $443 | | Diluted EPS | $1.20 | $1.25 | Consolidated Condensed Balance Sheets Total assets decreased slightly to $36.46 billion as of June 28, 2025, driven by goodwill and PPE reductions, while long-term debt significantly decreased Balance Sheet Highlights (in millions) | Account | June 28, 2025 | Sept 28, 2024 | | :--- | :--- | :--- | | Total Current Assets | $9,859 | $9,751 | | Goodwill | $9,468 | $9,819 | | Total Assets | $36,464 | $37,100 | | Long-Term Debt | $8,179 | $9,713 | | Total Shareholders' Equity | $18,468 | $18,514 | | Total Liabilities and Equity | $36,464 | $37,100 | Consolidated Condensed Statements of Cash Flows Operating cash flow decreased to $1.62 billion for the first nine months of fiscal 2025, with significant cash used for debt payments and dividends, resulting in a net cash decrease Nine Months Ended - Cash Flow Highlights (in millions) | Cash Flow Activity | June 28, 2025 | June 29, 2024 | | :--- | :--- | :--- | | Cash Provided by Operating Activities | $1,620 | $1,973 | | Cash Used for Investing Activities | $(405) | $(854) | | Cash (Used for) Provided by Financing Activities | $(1,377) | $883 | | (Decrease) Increase in Cash | $(170) | $1,996 | | Cash and Cash Equivalents at End of Period | $1,547 | $2,569 | Non-GAAP Reconciliations This section provides detailed reconciliations of GAAP to non-GAAP financial measures, including EPS, operating income by segment, EBITDA, and free cash flow Reconciliation of GAAP to Non-GAAP Results Q3 2025 GAAP EPS of $0.17 was adjusted to $0.91, primarily due to a $343 million goodwill impairment, while nine-month GAAP EPS of $1.20 adjusted to $2.97 Q3 2025 GAAP to Non-GAAP EPS Reconciliation | Item | EPS Impact | | :--- | :--- | | GAAP EPS | $0.17 | | Goodwill Impairment | +$0.96 | | Network optimization plan | -$0.18 | | The Netherlands facility | -$0.04 | | Other adjustments | -$0.00 | | Adjusted Non-GAAP EPS | $0.91 | Nine Months 2025 GAAP to Non-GAAP EPS Reconciliation | Item | EPS Impact | | :--- | :--- | | GAAP EPS | $1.20 | | Goodwill Impairment | +$0.96 | | Legal contingency accruals | +$0.73 | | Other adjustments | +$0.08 | | Adjusted Non-GAAP EPS | $2.97 | Reconciliation of Adjusted Operating Income by Segment Q3 2025 Beef segment's GAAP operating loss of $494 million was adjusted to a $151 million loss after accounting for a $343 million goodwill impairment Q3 2025 Operating Income Reconciliation by Segment (in millions) | Segment | Reported OI (Loss) | Goodwill Impairment | Other Adj. | Adjusted OI (Loss) | | :--- | :--- | :--- | :--- | :--- | | Beef | $(494) | $343 | $0 | $(151) | | Chicken | $367 | $0 | $(22) | $345 | | Prepared Foods | $302 | $0 | $(56) | $246 | | Total | $260 | $343 | $(98) | $505 | Reconciliation of EBITDA and Adjusted EBITDA Tyson Foods reported $2.90 billion EBITDA and $3.53 billion Adjusted EBITDA for the twelve months ended June 28, 2025, with net debt to Adjusted EBITDA improving to 2.1x EBITDA and Leverage Ratios (Twelve Months Ended) | Metric | June 28, 2025 | Sept 28, 2024 | | :--- | :--- | :--- | | EBITDA | $2,899M | $2,872M | | Adjusted EBITDA | $3,529M | $3,120M | | Total net debt | $7,517M | $8,060M | | Net debt/EBITDA | 2.6x | 2.8x | | Net debt/Adjusted EBITDA | 2.1x | 2.6x | Reconciliation of Free Cash Flow Free cash flow for the nine months ended June 28, 2025, was $929 million, a decrease from the prior year, calculated from $1.62 billion in operating cash flow Free Cash Flow Reconciliation (Nine Months Ended, in millions) | Line Item | June 28, 2025 | June 29, 2024 | | :--- | :--- | :--- | | Cash Provided by Operating Activities | $1,620 | $1,973 | | Additions to property, plant and equipment | $(691) | $(884) | | Free cash flow | $929 | $1,089 |